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[LOGO]
PROSPECTUS SUPPLEMENT
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(TO PROSPECTUS DATED MARCH 31, 1999)
$750,000,000
DEERE & COMPANY
$500,000,000 7.85% DEBENTURES DUE MAY 15, 2010
$250,000,000 8.10% DEBENTURES DUE MAY 15, 2030
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The debentures due 2010 will bear interest at 7.85% per year and will mature
on May 15, 2010 and the debentures due 2030 will bear interest at 8.10% per year
and will mature on May 15, 2030. Deere will pay interest on the debentures on
May 15 and November 15 of each year. The first interest payment will be made on
November 15, 2000. The debentures will not be redeemable before maturity.
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<CAPTION>
PUBLIC UNDERWRITING PROCEEDS BEFORE
OFFERING PRICE(1) DISCOUNT EXPENSES TO DEERE
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<S> <C> <C> <C>
Per debenture due 2010............. 99.953% .65% 99.303%
Total.............................. $499,765,000 $3,250,000 $496,515,000
Per debenture due 2030............. 99.915% .875% 99.04%
Total.............................. $249,787,500 $2,187,500 $247,600,000
</TABLE>
(1) Plus accrued interest from May 1, 2000, if settlement occurs after that
date
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The debentures will be ready for delivery in book-entry form only through
the facilities of The Depository Trust Company, Clearstream Luxembourg or
Euroclear on or about May 1, 2000.
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JOINT BOOK-RUNNING MANAGERS
MERRILL LYNCH & CO. SALOMON SMITH BARNEY
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BANC ONE CAPITAL MARKETS, INC.
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON
DEUTSCHE BANC ALEX. BROWN
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The date of this prospectus supplement is April 26, 2000.
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TABLE OF CONTENTS
<TABLE>
PROSPECTUS SUPPLEMENT
PAGE
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Use of Proceeds............................................. S-3
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Description of the Debentures............................... S-3
United States Federal Tax Considerations to Non-United
States Holders............................................ S-6
Underwriting................................................ S-9
PROSPECTUS
Where You Can Find More Information......................... 2
The Company................................................. 3
Use of Proceeds............................................. 4
Prospectus.................................................. 4
Prospectus Supplements...................................... 4
Description of Debt Securities.............................. 4
Description of Debt Warrants................................ 19
Plan of Distribution........................................ 20
Legal Opinions.............................................. 21
Experts..................................................... 21
</TABLE>
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You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We have
not, and the underwriters have not, authorized any other person to provide you
with different or additional information. If anyone provides you with different
or additional information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in or incorporated by reference in this prospectus
supplement and the accompanying prospectus is accurate as of their respective
dates. Our business, financial condition, results of operations and prospects
may have changed since then.
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USE OF PROCEEDS
Deere expects to use the net proceeds from the sale of the debentures to
reduce the amount of short-term debt it has issued to fund its U.S. equipment
operations and its purchase of the Timberjack Group. Before then, Deere may
invest these proceeds in short-term securities. On April 26, 2000, Deere had
outstanding $1,507 million of short-term debt issued to fund its U.S. equipment
operations and the acquisition of the Timberjack Group. This short-term debt
bore interest or discount rates ranging from 5.60% to 6.14%. Deere will continue
to incur short-term debt, primarily by issuing commercial paper, to finance its
current operations. See "Use of Proceeds" in the prospectus.
In December 1999, Deere announced an agreement to acquire the Timberjack
Group, headquartered in Helsinki, Finland, from the Metso Corporation for
approximately euro 600 million. Timberjack Group, a leading manufacturer of
forestry equipment, reported annual sales of euro 471 million in 1999. This
acquisition will broaden the forestry product line and customer base for Deere's
construction equipment segment. Deere has gained formal approval by both the
Antitrust Division of the U.S. Department of Justice and the Canadian
Competition Bureau to complete the purchase of the Timberjack Group, and expects
to close the transaction by the end of April.
DESCRIPTION OF THE DEBENTURES
The debentures due 2010 and the debentures due 2030 will constitute separate
series of senior debt securities issued under the Indenture dated as of July 1,
1994 (the "Senior Indenture") between the Company and The Chase Manhattan Bank,
Trustee.
The Debentures initially will be limited to $750,000,000 principal amount in
total, consisting of $500,000,000 principal amount of debentures due 2010 and
$250,000,000 principal amount of debentures due 2030. Each debenture will bear
interest at the applicable annual rate stated on the cover page of this
prospectus supplement. Interest will be payable on May 15 and November 15 of
each year, beginning November 15, 2000. Interest on the debentures will be paid
to holders of record on the May 1 or November 1 immediately before the interest
payment date. The debentures due 2010 will mature on May 15, 2010 and cannot be
redeemed before that date. The debentures due 2030 will mature on May 15, 2030
and cannot be redeemed before that date.
Deere may, without the consent of the relevant debenture holders, issue
additional debentures of the same series having the same ranking and the same
interest rate, maturity and other terms as the relevant debentures. Any
additional debentures with the same terms and the relevant debentures will
constitute a single series under the Senior Indenture. No additional debentures
of the same series may be issued if an Event of Default has occurred with
respect to the relevant debentures.
In the prospectus, there is a section called "Description of Debt
Securities--Provisions Applicable to Both the Senior and Subordinated
Indentures; Defeasance." This section has provisions on the full defeasance and
covenant defeasance of securities issued under the Senior Indenture. These
provisions will apply to the debentures.
For additional important information on the debentures, see "Description of
Debt Securities" in the prospectus. That information includes:
- Additional information on the terms of the debentures.
- General information on the Senior Indenture and the Trustee.
- A description of Events of Default under the Senior Indenture.
- A description of certain restrictive covenants contained in the Senior
Indenture.
- Additional information with respect to the delivery of the debentures in
book-entry form.
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BOOK-ENTRY, DELIVERY AND FORM
Each series of debentures will be issued in the form of one or more fully
registered global securities (the "Global Securities") which will be deposited
with, or on behalf of, The Depository Trust Company, New York, New York (the
"Depository") and registered in the name of Cede & Co., the Depository's
nominee. Debentures in certificated form will not be issued. Beneficial
interests in the Global Securities will be represented through book-entry
accounts of financial institutions acting on behalf of beneficial owners as
direct and indirect participants in the Depository. Investors may elect to hold
interests in the Global Securities through either the Depository (in the United
States) or Clearstream Banking, societe anonyme ("Clearstream Luxembourg") or
Morgan Guaranty Trust Company of New York, Brussels Office, as operator of the
Euroclear System ("Euroclear") (in Europe) if they are participants of those
systems, or, indirectly, through organizations that are participants in those
systems. Clearstream Luxembourg and Euroclear will hold interests on behalf of
their participants through customers' securities accounts in Clearstream
Luxembourg's and Euroclear's names on the books of their respective
depositaries, which in turn will hold such interests in customers' securities
accounts in the depositaries' names on the books of the Depository. At the
present time, Citibank, N.A. acts as U.S. depositary for Clearstream Luxembourg
and The Chase Manhattan Bank acts as U.S. depositary for Euroclear (in such
capacities, the "U.S. Depositaries"). Beneficial interests in the Global
Securities will be held in denominations of $1,000 and integral multiples
thereof. Except as set forth below or in the prospectus, the Global Securities
may be transferred, in whole and not in part, only to another nominee of the
Depository or to a successor of the Depository or its nominee.
Clearstream Luxembourg advises that it is incorporated under the laws of
Luxembourg as a professional depositary. Clearstream Luxembourg holds securities
for its participating organizations ("Clearstream Luxembourg Participants") and
facilitates the clearance and settlement of securities transactions between
Clearstream Luxembourg Participants through electronic book-entry changes in
accounts of Clearstream Luxembourg Participants, thereby eliminating the need
for physical movement of certificates. Clearstream Luxembourg provides to
Clearstream Luxembourg Participants, among other things, services for
safekeeping, administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. Clearstream Luxembourg
interfaces with domestic markets in several countries. As a professional
depositary, Clearstream Luxembourg is subject to regulation by the Luxembourg
Monetary Institute. Clearstream Luxembourg Participants are recognized financial
institutions around the world, including underwriters, securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations and may include the underwriters or their affiliates. Indirect
access to Clearstream Luxembourg is also available to others, such as banks,
brokers, dealers and trust companies that clear through, or maintain a custodial
relationship with, a Clearstream Luxembourg Participant either directly or
indirectly.
Distributions with respect to each series of debentures held beneficially
through Clearstream Luxembourg will be credited to cash accounts of Clearstream
Luxembourg Participants in accordance with its rules and procedures, to the
extent received by the U.S. Depositary for Clearstream Luxembourg.
Euroclear advises that it was created in 1968 to hold securities for
participants of Euroclear ("Euroclear Participants") and to clear and settle
transactions between Euroclear Participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Euroclear includes various other services, including
securities lending and borrowing and interfaces with domestic markets in several
countries. Euroclear is operated by the Brussels, Belgium office of Morgan
Guaranty Trust Company of New York (the "Euroclear Operator"), under contract
with Euroclear Clearance Systems S.C., a Belgian cooperative corporation (the
"Cooperative"). All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are accounts
with the Euroclear Operator, not the Cooperative. The Cooperative
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establishes policy for Euroclear on behalf of Euroclear Participants. Euroclear
Participants include banks (including central banks), securities brokers and
dealers and other professional financial intermediaries and may include the
underwriters or their affiliates. Indirect access to Euroclear is also available
to other firms that clear through or maintain a custodial relationship with a
Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation, which is a member bank of the Federal Reserve System. As such, it
is regulated and examined by the Board of Governors of the Federal Reserve
System and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants, and has no record of, or relationship with, persons
holding through Euroclear Participants.
Distributions with respect to each series of debentures held beneficially
through Euroclear will be credited to the cash accounts of Euroclear
Participants in accordance with the Terms and Conditions, to the extent received
by the U.S. Depositary for Euroclear.
GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
Initial settlement for each series of debentures will be made in immediately
available funds. Secondary market trading between Depository Participants will
occur in the ordinary way in accordance with the Depository's rules and will be
settled in immediately available funds using the Depository's Same-Day Funds
Settlement System. Secondary market trading between Clearstream Luxembourg
Participants and/or Euroclear Participants will occur in the ordinary way in
accordance with the applicable rules and operating procedures of Clearstream
Luxembourg and Euroclear and will be settled using the procedures applicable to
conventional eurobonds in immediately available funds.
Cross-market transfers between persons holding directly or indirectly
through the Depository on the one hand, and directly or indirectly through
Clearstream Luxembourg or Euroclear Participants, on the other, will be effected
within the Depository in accordance with the Depository's rules on behalf of the
relevant European international clearing system by its U.S. Depositary; however,
such cross-market transactions will require delivery of instructions to the
relevant European international clearing system by the counterparty in such
system in accordance with its rules and procedures and within its established
deadlines (European time). The relevant European international clearing system
will, if the transaction meets its settlement requirements, deliver instructions
to its U.S. Depositary to take action to effect final settlement on its behalf
by delivering or receiving debentures in the Depository, and making or receiving
payment in accordance with normal procedures for same-day funds settlement
applicable to the Depository. Clearstream Luxembourg Participants and Euroclear
Participants may not deliver instructions directly to their respective
U.S. Depositaries.
Because of time-zone differences, credits of debentures received in
Clearstream Luxembourg or Euroclear as a result of a transaction with a
Depository Participant will be made during subsequent securities settlement
processing and dated the business day following the Depository settlement date.
Such credits, or any transactions in such debentures settled during such
processing, will be reported to the relevant Euroclear Participants or
Clearstream Luxembourg Participants on such business day. Cash received in
Clearstream Luxembourg or Euroclear as a result of sales of debentures by or
through a
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Clearstream Luxembourg Participant or a Euroclear Participant to a Depository
Participant will be received with value on the business day of settlement in the
Depository but will be available in the relevant Clearstream Luxembourg or
Euroclear cash account only as of the business day following settlement in the
Depository.
Although the Depository, Clearstream Luxembourg and Euroclear have agreed to
the foregoing procedures in order to facilitate transfers of securities among
participants of the Depository, Clearstream Luxembourg and Euroclear, they are
under no obligation to perform or continue to perform such procedures and such
procedures may be discontinued at any time.
UNITED STATES FEDERAL TAX CONSIDERATIONS
TO NON-UNITED STATES HOLDERS
The following is a general discussion of certain United States federal
income and estate tax considerations relating to the ownership and disposition
of debentures by a person that is not a "United States person" for United States
federal income tax purposes (a "Non-United States Holder"). A "United States
person" is a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, an estate the income of
which is subject to United States federal income taxation regardless of its
source or a trust if (i) a U.S. court is able to exercise primary supervision
over the trust's administration and (ii) one or more United States persons have
the authority to control all of the trust's substantial decisions. This
discussion is based on provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury regulations issued thereunder and interpretations
thereof as of the date hereof, all of which are subject to change. In addition,
the discussion does not consider specific facts and circumstances that may be
relevant to a particular Non-United States Holder's tax position. Accordingly,
each Non-United States Holder is urged to consult its own tax advisor with
respect to the United States tax consequences of the ownership and disposition
of debentures, as well as any tax consequences that may arise under the laws of
any state, municipality, foreign country or other taxing jurisdiction.
Under present U.S. federal income and estate tax law, and subject to the
discussion below concerning backup withholding:
(1) no U.S. federal income or withholding tax will be imposed with respect to
the payment by Deere or the paying agent of principal or interest on a
debenture owned by a Non-United States Holder, provided that, in the case
of interest, (a) such Non-United States Holder does not actually or
constructively own 10% or more of the total combined voting power of all
classes of stock of Deere entitled to vote within the meaning of section
871(h)(3) of the Code and the regulations thereunder, (b) such Non-United
States Holder is not a controlled foreign corporation that is related,
directly or indirectly, to Deere through sufficient stock ownership,
(c) such Non-United States Holder is not a bank whose receipt of interest
on a note is described in section 881(c)(3)(A) of the Code, (d) such
interest is not effectively connected with the conduct of a U.S. trade or
business by such Non-United States Holder, and (e) such Non-United States
Holder satisfies the certification requirement (described generally below)
set forth in section 871(h) and section 881(c) of the Code and the
regulations thereunder (the "Portfolio Interest Exception");
(2) no U.S. federal income or withholding tax will be imposed with respect to
any gain or income realized by a Non-United States Holder upon the sale,
exchange, redemption, retirement or other disposition of a debenture
(provided that, in the case of proceeds representing accrued interest, the
requirements of the Portfolio Interest Exception described above are
satisfied) unless (1) in the case of gain, such Non-United States Holder is
an individual who is present in the United States for 183 days or more
during the taxable year of the disposition and certain other conditions are
met, or (2) such gain or income is effectively connected with the conduct
of a U.S. trade or
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business by such Non-United States Holder (and, if an income tax treaty
applies, generally is attributable to a U.S. "permanent establishment"
maintained by such Non-United States Holder); and
(3) a debenture beneficially owned by an individual, who is not a citizen of
the United States and who at the time of death is a nonresident of the U.S.
(as defined for U.S. state tax purposes), will not be subject to United
States federal estate tax as a result of such individual's death, provided
that such individual does not actually or constructively own 10% or more of
the total combined voting power of all classes of stock of Deere entitled
to vote within the meaning of section 871(h)(3) of the Code and provided
that the interest payments with respect to such debenture would not have
been, if received at the time of such individual's death, effectively
connected with the conduct of a U.S. trade or business by such individual.
To satisfy the certification requirement referred to above with respect to
the Portfolio Interest Exception, the beneficial owner of a debenture, or a
financial institution holding the debenture on behalf of such owner, must
provide the paying agent or Deere, in accordance with specified procedures, with
a statement to the effect that the beneficial owner is not a United States
Holder. Pursuant to current U.S. Treasury regulations, a statement will satisfy
this certification requirement if (a) the beneficial owner provides his/her name
and address, and certifies, under penalties of perjury, that he/ she is not a
United States Holder (which certification may be made on an IRS Form W-8BEN), or
(b) a financial institution holding the debenture on behalf of the beneficial
owner certifies, under penalties of perjury, that such statement has been
received by it and furnishes a copy thereof to a paying agent.
With respect to debentures held by a foreign partnership, under current U.S.
federal income tax law, Form W-8IMY may be provided by the foreign partnership.
However, for interest and disposition proceeds paid with respect to a debenture
after December 31, 2000, unless the foreign partnership has entered into a
withholding agreement with the Internal Revenue Service ("IRS"), a foreign
partnership will be required, in addition to providing a Form W-8IMY, to attach
an appropriate certification by each partner. A look-through rule will apply in
the case of tiered partnerships. Prospective investors, including foreign
partnerships and their partners, should consult their tax advisors regarding
possible additional reporting requirements.
If a Non-United States Holder cannot satisfy the requirements of the
Portfolio Interest Exception described above, interest payments on a debenture,
made to such Non-United States Holder, will be subject to a 30% withholding tax
unless the beneficial owner of the debenture provides to the paying agent or
Deere a properly executed (a) Form W-8BEN claiming an exemption from or a
reduction of withholding tax under the benefit of an applicable income tax
treaty or (b) Form W-8ECI stating that interest paid on the debenture is not
subject to withholding tax because the interest income is effectively connected
with the beneficial owner's conduct of a trade or business in the United States.
Under the new U.S. Treasury regulations that generally will become effective
for payments made beginning January 1, 2001 (the "New Regulations"), the
certification requirement described above will be modified in certain respects.
In general, the New Regulations do not significantly alter the substantive
withholding and information reporting requirements but rather unify current
certification procedures and forms and clarify reliance standards. Non-United
States Holders should consult their own tax advisors to determine the effects of
the application of the New Regulations to their particular circumstances.
If a Non-United States Holder is engaged in a trade or business in the
United States, and income derived by such Non-United States Holder in respect of
a debenture is effectively connected with the conduct of such trade or business
(and, if an income tax treaty applies, such income generally is attributable to
a U.S. permanent establishment maintained by the Non-United States Holder), then
the Non-United States Holder generally will be subject to U.S. federal income
tax on such income on a net
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basis in the same manner as a United States Holder. In addition, if such
Non-United States Holder is a foreign corporation, it may be subject to a branch
profits tax equal to 30% or applicable lower income tax treaty rate on its
effectively connected earnings and profits for the taxable year subject to
adjustments.
INFORMATION REPORTING AND BACKUP WITHHOLDING
No information reporting or backup withholding will be required with respect
to payments on a debenture and to the proceeds of the disposition of a debenture
made by Deere or any paying agent to Non-United States Holders if the
certification requirement relating to the Portfolio Interest Exception (as
described above under "--Non-United States Holders") has been met and the payer
does not have actual knowledge that the beneficial owner is a U.S. person.
In addition, backup withholding and information reporting will not apply if
payments on a debenture are paid or collected by a foreign office of a
custodian, nominee or other foreign agent on behalf of the beneficial owner of
such debenture, or if a foreign office of a broker (as defined in applicable
U.S. Treasury regulations) pays the proceeds of the disposition of a debenture
to the owner thereof. If, however, such nominee, custodian, agent or broker is,
for U.S. federal income tax purposes, (a) a U.S. person, (b) a controlled
foreign corporation, (c) a foreign person that derives 50% or more of its gross
income for certain periods from the conduct of a trade or business in the United
States, or (d) with respect to payments made beginning January 1, 2001, a
foreign partnership if, at any time during its tax year, one or more of its
partners are U.S. persons who in the aggregate hold more than 50% of the income
or capital interest in the partnership, or the partnership is engaged in a U.S.
trade or business, then such payments will be subject to information reporting
(but, under current law, not backup withholding), unless (i) such custodian,
nominee, agent or broker has documentary evidence in its records that the
beneficial owner is not a U.S. person and certain other conditions are met or
(ii) the beneficial owner otherwise establishes an exemption.
Payments on a debenture paid to a Non-United States Holder by a U.S. office
of a custodian, nominee or agent, or the payment by the U.S. office of a broker
of the proceeds of disposition of a debenture, will be subject to both backup
withholding and information reporting unless the beneficial owner provides the
statement referred to above in connection with the certification requirement for
the Portfolio Interest Exception, and the payor does not have actual knowledge
that the beneficial owner is a U.S. person or otherwise establishes an
exemption.
The New Regulations modify certain certification requirements for backup
withholding. Non-United States Holders should consult their own tax advisors to
determine the effects of the application of the New Regulations to their
particular circumstances.
Any amounts withheld from payments to a holder under the backup withholding
rules will be credited toward such holder's U.S. federal income tax liability,
if any. To the extent that the amounts withheld exceed such tax liability, the
excess may be refunded to the holder provided that the required information is
furnished to the IRS. In addition to providing the necessary information, the
holder must file a U.S. income tax return in order to obtain a refund of the
excess withholding.
The U.S. federal tax summary set forth above is included for general
information only and may not be applicable depending upon a holder's particular
situation. Prospective holders of the debentures are urged to consult their own
tax advisors with respect to the tax consequences to them of the acquisition,
ownership and disposition of the debentures, including the tax consequences
under U.S. federal, state, local, foreign and other tax laws and the effects of
changes in such laws.
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UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
among Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith
Barney Inc., Chase Securities Inc., Deutsche Bank Securities Inc., Banc One
Capital Markets, Inc., and Credit Suisse First Boston Corporation, as
underwriters, and us, we have agreed to sell to the underwriters, and the
underwriters have severally agreed to purchase, the principal amount of each
series of debentures set forth opposite their names below. Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Salomon Smith Barney Inc. are acting as
joint book-running managers. The underwriting agreement provides that the
obligations of the underwriters are subject to certain conditions precedent and
that when such conditions are satisfied, the underwriters will be obligated to
purchase all of the debentures.
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<CAPTION>
PRINCIPAL AMOUNT OF PRINCIPAL AMOUNT OF
UNDERWRITER DEBENTURES DUE 2010 DEBENTURES DUE 2030
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<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated ............................... $175,000,000 $ 81,250,000
Salomon Smith Barney Inc.............................. 175,000,000 81,250,000
Chase Securities Inc.................................. 50,000,000 25,000,000
Deutsche Bank Securities Inc.......................... 50,000,000 25,000,000
Banc One Capital Markets, Inc......................... 25,000,000 25,000,000
Credit Suisse First Boston Corporation................ 25,000,000 12,500,000
------------ ------------
Total....................................... $500,000,000 $250,000,000
============ ============
</TABLE>
The underwriters have advised us that they propose initially to offer the
relevant debentures to the public at the relevant public offering price set
forth on the cover page of this prospectus supplement and to certain dealers at
such prices less a concession not in excess of .4% and .5% of the principal
amount of the debentures due 2010 and the debentures due 2030, respectively. The
underwriters may allow, and such dealers may reallow, a discount not in excess
of .25% of the principal amount of the debentures due 2010 and the debentures
due 2030, to certain other dealers. After the initial public offering, the
underwriters may change the public offering prices, concessions and discounts.
The debentures due 2010 and the debentures due 2030 are new issues of
securities, and there is currently no established trading market for the
debentures. The underwriters have advised us that they intend to make a market
in the debentures, but they are not obligated to do so. The underwriters may
discontinue any market making in the debentures at any time without notice. We
can give you no assurance as to the liquidity of, or any trading market for, the
debentures.
In connection with this offering, the underwriters are permitted to engage
in transactions that stabilize the market price of the debentures. Such
transactions consist of bids or purchases to peg, fix or maintain the price of
the debentures. If the underwriters create a short position in the debentures in
connection with this offering, that is, if they sell a greater aggregate
principal amount of the debentures of a particular series than is set forth on
the cover of this prospectus supplement, the underwriters may reduce that short
position by purchasing debentures of that series in the open market. Purchases
of a security for the purpose of stabilization or to reduce a short position
could cause the price of the security to be higher than it might be in the
absence of such purchases.
Neither we nor any underwriter makes any representation or prediction as to
the direction or magnitude of any effect that the transactions described above
may have on the price of the debentures. In addition, neither we nor any
underwriter makes any representation that the underwriters will engage in these
transactions or that these transactions, once commenced, will not be
discontinued at any time without notice.
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The underwriters are offering the debentures, subject to prior sale, when,
as and if issued to and accepted by them, subject to approval of legal matters
by their counsel, including the validity of the debentures and other conditions
contained in the underwriting agreement, such as the receipt by the underwriters
of officer's certificates and legal opinions. The underwriters reserve the right
to withdraw, cancel or modify offers to the public and to reject orders in whole
or in part.
Deere has agreed to indemnify the underwriters against, or to contribute to
payments that the underwriters may be required to make in respect of, certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
Hans W. Becherer, Chairman of Deere, and John R. Stafford, a director of
Deere, are directors of The Chase Manhattan Corporation and The Chase Manhattan
Bank (the Trustee and Paying Agent under the Senior Indenture), which are
affiliates of Chase Securities Inc. Antonio Madero B., a director of Deere, is a
member of the International Advisory Council of The Chase Manhattan Corporation.
Thomas H. Patrick, a director of Deere, is an Executive Vice President, Chief
Financial Officer, Chairman of Special Advisory Services and a member of the
Office of the Chairman, of Merrill Lynch & Co., Inc., which is an affiliate of
Merrill Lynch, Pierce, Fenner & Smith Incorporated. A commercial banking
affiliate of Credit Suisse First Boston Corporation has commercial banking and
lending relationships with Deere. Some of the underwriters and/or their
affiliates have engaged in, and may in the future engage in, investment banking
and other commercial dealings in the ordinary course of business with Deere or
its affiliates. They have received customary fees and commissions for these
transactions.
Deere expects to pay an estimated $400,000 of expenses, not including the
underwriting discount, in connection with this offering.
S-10
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DEERE & COMPANY
By this prospectus, we offer up to
$1,450,000,000 of--
DEBT SECURITIES
WARRANTS TO PURCHASE DEBT SECURITIES
--------------------------------------------
We will provide the specific terms of these securities in supplements to this
prospectus. You should read this prospectus and the supplements carefully before
you invest.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
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[LOGO]
The date of this prospectus is March 31, 1999.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549
and in New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public from the SEC's web site at
http://www.sec.gov. Our common stock is listed on the New York Stock Exchange.
Our common stock is also listed on the Chicago and Frankfurt (Germany) Stock
Exchanges. Information about us also is available at those locations.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents that are considered part of this prospectus. Later
information that we file with the SEC will automatically update and supersede
this information. We incorporate by reference the documents listed below and any
future filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 by us until our offering of securities has been
completed. This prospectus is part of a registration statement filed with the
SEC.
- Annual Report on Form 10-K for the year ended October 31, 1998.
- Current Reports on Form 8-K dated November 24, 1998 and February 16, 1999.
- Quarterly Report on Form 10-Q for the quarter ended January 31, 1999.
You may obtain a copy of these filings at no cost, by writing or telephoning
us at the following address:
Deere & Company
One John Deere Place
Moline, Illinois
61265-8098
Attn: Corporate Secretary
(309) 765-8000
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. This prospectus is an offer to
sell or to buy only the securities referred to herein, but only under
circumstances and in jurisdictions where it is lawful to do so. The information
contained in this prospectus is current only as of the date hereof.
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THE COMPANY
We (Deere & Company and its subsidiaries, collectively called "John Deere")
manufacture, distribute and finance a full range of agricultural equipment; a
broad range of equipment for construction, forestry and public works; and a
variety of commercial and consumer equipment. We also provide credit, insurance
products and health care for businesses and the general public. We believe that
our worldwide sales of agricultural equipment during recent years have been
greater than those of any other business in our industry. We also believe that
John Deere is an important provider of most of the types of construction
equipment that we market, and the leader in some size ranges. We also believe we
are the world's largest producer of premium turf care equipment and utility
vehicles. John Deere's operations are categorized into six business segments:
The worldwide AGRICULTURAL EQUIPMENT segment manufactures and distributes a
full line of farm equipment--including tractors; combine, cotton, and
sugarcane harvesters; tillage, seeding and soil preparation machinery;
sprayers; hay and forage equipment; materials handling equipment; and
integrated precision farming technology.
The worldwide CONSTRUCTION EQUIPMENT segment manufactures and distributes a
broad range of machines used in construction, earthmoving and
forestry--including backhoe loaders; crawler dozers and loaders;
four-wheel-drive loaders; excavators; scrapers; motor graders; log skidders;
and forestry harvesters. This segment also includes the manufacture and
distribution of engines and drivetrain components for the original equipment
manufacturer (OEM) market.
The worldwide COMMERCIAL AND CONSUMER EQUIPMENT segment manufactures and
distributes equipment for commercial and residential uses--including small
tractors for lawn, garden, commercial and utility purposes; riding and
walk-behind mowers; golf course equipment; snowblowers; handheld products
such as chain saws, string trimmers and leaf blowers; skid-steer loaders;
utility vehicles; and other outdoor power products.
The products produced by the equipment segments are marketed primarily
through independent retail dealer networks and major retail outlets.
The CREDIT segment, which mainly operates in the United States and Canada,
primarily finances sales and leases by John Deere dealers of new and used
equipment and sales by non-Deere dealers of recreational products. In
addition, it provides wholesale financing to dealers of the foregoing
equipment and finances retail revolving charge accounts.
The INSURANCE segment issues policies in the United States primarily for:
general and specialized lines of commercial property and casualty insurance,
group accident and health insurance for employees of participating John
Deere dealers; and disability insurance for employees of John Deere.
The HEALTH CARE segment provides health management programs and related
administrative services in the United States to John Deere and commercial
clients.
The John Deere enterprise has manufactured agricultural machinery since
1837. The present company was incorporated under the laws of Delaware in 1958.
The address of our principal office is One John Deere Place, Moline, Illinois
61265-8098. Its telephone number is (309) 765-8000.
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USE OF PROCEEDS
Except as may be described otherwise in a prospectus supplement, the net
proceeds from the sale of the Securities will be added to our general funds and
will be used for working capital and other general corporate purposes. Such
proceeds may be applied initially to the reduction of short-term indebtedness.
PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Under this shelf process, we may
sell any combination of the following securities in one or more offerings up to
a total dollar amount of $1,450,000,000 (or the equivalent thereof if any of the
Securities are denominated in a currency, currency unit or composite currency
("Currency") other than the U.S. dollar): (1) unsecured debt securities ("Debt
Securities") which may be either senior (the "Senior Securities") or
subordinated (the "Subordinated Securities") or (2) warrants to purchase Debt
Securities ("Debt Warrants"). The terms of the securities will be determined at
the time of offering.
We will refer to the Debt Securities and Debt Warrants, or any combination
of those securities, proposed to be sold pursuant to this prospectus and an
accompanying prospectus supplement as the "Offered Securities". The Offered
Securities, together with any Debt Securities issuable upon exercise of Debt
Warrants or conversion or exchange of other Offered Securities, will be referred
to as the "Securities."
PROSPECTUS SUPPLEMENTS
Information about the Securities will be disclosed in this prospectus, a
prospectus supplement and pricing supplements. The supplements may also add,
delete or change information contained in this prospectus. The term "prospectus
supplement" as used herein includes pricing supplements relating to the
particular Securities. Since the specific terms of the Securities are made at
the time of pricing, you should rely on the information in the prospectus
supplement and pricing supplement that is inconsistent with the information in
this prospectus.
For more detail on the terms of the securities, you should read the exhibits
filed with our registration statement.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued in one or more distinct series by us.
This section summarizes terms of the Debt Securities that are common to all
series. Most of the financial terms and other specific terms of any series of
Debt Securities that we offer will be described in a prospectus supplement to be
attached to the front of this prospectus. Since the terms of specific Debt
Securities may differ from the general information we have provided below, you
should rely on information in the prospectus supplement that is inconsistent
with the information below.
As required by Federal law for all bonds and notes of companies that are
publicly offered, the Debt Securities are governed by a document called an
"Indenture". An Indenture is a contract between us and a financial institution
acting as Trustee on your behalf. The Trustee has two main roles. First, the
Trustee can enforce your rights against us if we default. There are some
limitations on the extent to which the Trustee acts on your behalf, described
later on page 10. Second, the Trustee performs certain administrative duties for
us.
The Indentures and associated documents contain the full legal text of the
matters described in this section. The form of each Indenture is contained in
the registration statement that we have filed with the SEC. See "Where You Can
Find More Information" on page 2 for information on how to obtain a copy of the
Indentures.
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Senior Securities will be issued under an Indenture dated as of July 1,
1994, as supplemented from time to time (the "Senior Indenture"), between us and
The Chase Manhattan Bank (successor by merger to The Chase Manhattan Bank
(National Association)), Trustee (the "Senior Trustee"), and Subordinated
Securities will be issued under an Indenture dated as of March 15, 1999, as
supplemented from time to time (the "Subordinated Indenture"), between us and
The Bank of New York, Trustee (the "Subordinated Trustee"). The term "Trustee"
refers to either the Senior Trustee or the Subordinated Trustee, as appropriate.
We will refer to the Senior Indenture and the Subordinated Indenture together as
the "Indentures" and each as an "Indenture." The Indentures are subject to and
governed by the Trust Indenture Act of 1939, as amended (the "TIA").
Because this section is a summary, it does not describe every aspect of the
Debt Securities. This summary is subject to and qualified in its entirety by
reference to all the provisions of the Indentures, including definitions of
certain terms used in the Indentures. For example, in this section we use
capitalized words to signify terms that have been specifically defined in the
Indentures. Some of the definitions are repeated herein, but for the rest you
will need to read the Indenture. We also include references in parentheses to
certain sections of the Indentures or TIA. Whenever we refer to particular
sections or defined terms of the Indenture in this prospectus or in the
prospectus supplement, such sections or defined terms are incorporated by
reference herein or in the prospectus supplement. Unless otherwise noted, the
section numbers refer to both Indentures.
PROVISIONS APPLICABLE TO BOTH THE SENIOR AND SUBORDINATED INDENTURES
GENERAL
The Debt Securities will be unsecured obligations of ours. The Senior
Securities will rank equally with all other unsecured and unsubordinated
indebtedness of ours. The Subordinated Securities will be subordinated in right
of payment to the prior payment in full of our Senior Indebtedness as described
under "--Subordinated Indenture Provisions--Subordination".
Each Indenture provides that any Debt Securities proposed to be sold
pursuant to this prospectus and the attached prospectus supplement ("Offered
Debt Securities") and any Debt Securities issuable upon the exercise of Debt
Warrants or upon conversion or exchange of other Offered Securities ("Underlying
Debt Securities"), as well as our other unsecured debt securities, may be issued
under such Indenture in one or more series.
With respect to the Offered Debt Securities and any Underlying Debt
Securities, you should read the prospectus supplement for the following terms:
(1) The title of such Debt Securities and whether such Debt Securities
will be Senior Securities or Subordinated Securities.
(2) The total principal amount of such Debt Securities and any limit on
the total principal amount of Debt Securities of such series.
(3) If not the principal amount of the Debt Securities, the portion of
the principal amount payable upon acceleration of the maturity of the Debt
Securities or how such portion will be determined.
(4) The date or dates, or how such date or dates will be determined or
extended, when the principal of such Debt Securities will be payable.
(5) The interest rate or rates which the Debt Securities will bear, if
any, or how such rate or rates will be determined, the interest payment
dates, any record dates for such payments and the basis upon which interest
will be calculated if other than that of a 360-day year of twelve 30-day
months.
(6) Any optional redemption provisions.
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<PAGE>
(7) Any sinking fund or other provisions that would obligate us to
repurchase or otherwise redeem the Debt Securities.
(8) The form of such Debt Securities, including whether such Debt
Securities are to be issuable in permanent or temporary global form, as
Registered Securities, Bearer Securities or both, any restrictions on the
offer, sale or delivery of Bearer Securities and the terms, if any, upon
which Bearer Securities of the series may be exchanged for Registered
Securities of the series and VICE VERSA (if permitted by applicable laws and
regulations).
(9) If other than U.S. dollars, the Currency or Currencies of such Debt
Securities.
(10) Whether the amount of payments of principal, premium or interest, if
any, on such Debt Securities will be determined with reference to an index,
formula or other method (which could be based on one or more Currencies,
commodities, equity indices or other indices) and how such amounts will be
determined.
(11) The place or places, if any, other than or in addition to The City
of New York, of payment, transfer, conversion and/or exchange of such Debt
Securities.
(12) If other than denominations of $1,000 in the case of Registered
Securities and $5,000 in the case of Bearer Securities, the denominations in
which the offered Debt Securities will be issued.
(13) The applicability of the provisions of Article Fourteen of the
applicable Indenture described under "Defeasance and Covenant Defeasance"
and any provisions in modification of, in addition to or in lieu of any of
the provisions of such Article.
(14) Whether and under what circumstances we will pay Additional Amounts,
as contemplated by Section 1004 of the applicable Indenture, in respect of
any tax, assessment or governmental charge and, if so, whether we will have
the option to redeem such Debt Securities rather than pay such Additional
Amounts (and the terms of any such option).
(15) Any provisions granting special rights to the holders of such Debt
Securities upon the occurrence of such events as may be specified.
(16) Any changes or additions to the Events of Default or covenants.
(17) Whether such Debt Securities will be convertible into or
exchangeable for any other securities and the applicable terms and
conditions.
(18) Any other terms of such Debt Securities.
For purposes of this prospectus, any reference to the payment of principal
of, premium or interest, if any, on Debt Securities will include Additional
Amounts if required by the terms of such Debt Securities.
Each Indenture will not limit the amount of Debt Securities that may be
issued as authorized from time to time by us. (Section 301) Securities issued
under an Indenture, when a single Trustee is acting for all debt securities
issued under such Indenture, are the "Indenture Securities". Each Indenture also
provides that there may be more than one Trustee thereunder, each with respect
to one or more different series of Indenture Securities. See "Resignation of
Trustee" on page 15. At a time when two or more Trustees are acting under either
Indenture, each with respect to only certain series, the term "Indenture
Securities" means the one or more series of Debt Securities with respect to
which each respective Trustee is acting. In the event that there is more than
one Trustee under either Indenture, the powers and trust obligations of each
Trustee described in this prospectus will extend only to the one or more series
of Indenture Securities for which it is Trustee. If two or more Trustees are
acting under either Indenture, then the Indenture Securities for which each
Trustee is acting would be treated as if issued under separate indentures.
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The Indentures do not contain any provisions that give you protection in the
event we issue a large amount of debt or we are acquired by another entity.
Reference is made to the prospectus supplement for information with respect
to any deletions from, modifications of or additions to the Events of Default or
covenants of ours that are described below, including any addition of a covenant
or other provision providing event risk or similar protection.
We have the ability to issue Indenture Securities with terms different from
those of Indenture Securities previously issued and, without the consent of the
holders thereof, to reopen a previous issue of a series of Indenture Securities
and issue additional Indenture Securities of such series (unless such reopening
was restricted when such series was created).
CONVERSION AND EXCHANGE
If any Debt Securities are convertible into or exchangeable for other
Securities, the prospectus supplement will explain terms and conditions of such
conversion or exchange, including the conversion price or exchange ratio (or the
calculation method), the conversion or exchange period (or how such period will
be determined), if conversion or exchange will be mandatory or at the option of
the holder or our option, provisions for adjustment of the conversion price or
the exchange ratio and provisions affecting conversion or exchange in the event
of the redemption of the Debt Securities. Such terms may also include provisions
under which the number or amount of other Securities to be received by the
holders of such Debt Securities upon conversion or exchange would be calculated
according to the market price of such other Securities as of a time stated in
the prospectus supplement.
ADDITIONAL MECHANICS
FORM, EXCHANGE AND TRANSFER
Debt Securities may be issuable:
- as Registered Securities
- as Bearer Securities (unless otherwise stated in the prospectus supplement
with interest coupons attached) (Section 201)
- as both Registered Securities and Bearer Securities
- in denominations that are even multiples of $1,000 for Registered
Securities and even multiples of $5,000 for Bearer Securities.
(Section 302)
- in global form. See "--Book-Entry Debt Securities".
You may have your Registered Securities separated into more Registered
Securities of smaller denominations or combined into fewer Registered Securities
of larger denominations, as long as the total principal amount is not changed.
(Section 305) This is called an "exchange". If provided in the prospectus
supplement, you may exchange your Bearer Securities (with all unmatured coupons,
except as provided below, and all matured coupons which are in default) for
Registered Securities of the same series as long as the total principal amount
is not changed. Bearer Securities surrendered in exchange for Registered
Securities between a Regular Record Date or a Special Record Date and the
relevant interest payment dates will be surrendered without the coupon relating
to such interest payment dates, and interest will not be payable in respect of
the Registered Security issued in exchange for such Bearer Security, but will be
payable only to the holder of such coupon when due in accordance with the terms
of the applicable Indenture. Unless otherwise specified in the prospectus
supplement, Bearer Securities will not be issued in exchange for Registered
Securities. (Section 305)
You may transfer Registered Securities of a series and you may exchange Debt
Securities of a series at the office of the Trustee. The Trustee will act as our
agent for registering Registered Securities
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in the names of Holders and transferring Debt Securities. We may change this
appointment to another entity or perform the function itself. The entity
performing the role of maintaining the list of registered Holders is called the
"Registrar". The Registrar also will perform transfers. (Section 305)
You will not be required to pay a service charge to transfer or exchange
Debt Securities, but you may be required to pay for any tax or other
governmental charge associated with the exchange or transfer. The transfer or
exchange will only be made if the Registrar is satisfied with your proof of
ownership.
If we have designated additional transfer agents, they will be named in the
accompanying prospectus supplement. We may cancel the designation of any
particular transfer agent. We may also approve a change in the office through
which any transfer agent acts.
If the Securities are redeemable and we redeem less than all of the
Securities of a particular series, we may block the transfer or exchange of
Securities during the period beginning 15 days before the day we mail the notice
of redemption or publish such notice (in the case of Bearer Securities) and
ending on the day of that mailing or publication, as the case may be, in order
to freeze the list of Holders to prepare the mailing. We may also refuse to
register transfers or exchanges of Debt Securities selected for redemption,
except that we will continue to permit transfers and exchanges of the unredeemed
portion of any Debt Security being partially redeemed. (Section 305)
If the Offered Debt Securities are redeemable, the procedures for redemption
will be described in the accompanying prospectus supplement.
PAYMENT AND PAYING AGENTS
We will pay interest to you, if you are listed in the Trustee's records as
the owner of your Debt Security at the close of business on a particular day in
advance of each due date for interest on your Debt Security, even if you no
longer own the Debt Security, on the interest due date. That particular day,
usually about two weeks in advance of the interest due date, is called the
"Record Date", while persons who are listed in the Trustee's records as the
owners of Debt Securities at the close of business on a particular day are
referred to as "Holders". (Section 307) Holders buying and selling Debt
Securities must work out between them the appropriate purchase price given that
we will pay all the interest for an interest period to the Holders on the Record
Date. The most common manner is to adjust the sales price of the Debt Securities
to prorate interest fairly between buyer and seller based on their respective
ownership periods within the particular interest period. This prorated interest
amount is called "accrued interest".
We will deposit interest, principal and any other money due on the Debt
Securities with the Paying Agent specified in the prospectus supplement. We
initially appoint the Trustee as the Paying Agent.
IF YOU PLAN TO HAVE A BANK OR BROKERAGE FIRM HOLD YOUR SECURITIES, YOU SHOULD
ASK SUCH BANK OR BROKERAGE FIRM FOR INFORMATION ON HOW YOU WILL RECEIVE
PAYMENTS. (Section 305)
If Bearer Securities are issued, unless otherwise provided in the prospectus
supplement, we will maintain an office or agency outside the United States for
the payment of all amounts due on the Bearer Securities. If Debt Securities are
listed on the Luxembourg Stock Exchange or any other stock exchange located
outside the United States, we will maintain an office or agency for such Debt
Securities in any city located outside the United States required by such stock
exchange. (Section 1002) The initial locations of such offices and agencies will
be specified in the prospectus supplement. Unless otherwise provided in the
prospectus supplement, payment of interest on any Bearer Securities on or before
Maturity will be made only against surrender of coupons for such interest
installments as they mature. (Section 1001) Unless otherwise provided in the
prospectus supplement, no payment with respect to any Bearer Security will be
made at any office or agency of ours in the United States or by check mailed to
any address in the United States or by transfer to an account maintained with a
bank
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located in the United States. Notwithstanding the foregoing, payments of
principal of, premium and interest, if any, on Bearer Securities payable in U.S.
dollars will be made at the office of our Paying Agent in The City of New York
if (but only if) payment of the full amount in U.S. dollars at all offices or
agencies outside the United States is illegal or effectively precluded by
exchange controls or other similar restrictions. (Section 1002)
We may from time to time designate additional offices or agencies, approve a
change in the location of any office or agency and, except as provided above,
rescind the designation of any office or agency.
EVENTS OF DEFAULT
You will have special rights if an Event of Default occurs in respect of the
Debt Securities of your series and is not cured, as described later in this
subsection. (Section 501)
WHAT IS AN EVENT OF DEFAULT? The term "Event of Default" in respect of the
Debt Securities of your series means any of the following:
- We do not pay the principal of or any premium on a Debt Security of such
series on its due date.
- We do not pay interest on a Debt Security of such series within 30 days of
its due date.
- We do not deposit any sinking fund payment in respect of Debt Securities
of such series on its due date.
- We remain in breach of a covenant in respect of Debt Securities of such
series for 60 days after we receive a written notice of default stating we
are in breach. The notice must be sent by either the Trustee or Holders of
25% of the principal amount of Debt Securities of such series.
- We file for bankruptcy or certain other events in bankruptcy, insolvency
or reorganization occur.
- Any other Event of Default in respect of Debt Securities of such series
described in the prospectus supplement occurs. (Section 501)
An Event of Default for a particular series of Debt Securities does not
necessarily constitute an Event of Default for any other series of Debt
Securities issued under an Indenture. The Trustee may withhold notice to the
Holders of Debt Securities of any default (except in the payment of principal or
interest) if it considers such withholding of notice to be in the best interests
of the Holders. (Section 601)
REMEDIES IF AN EVENT OF DEFAULT OCCURS. If an Event of Default has occurred
and has not been cured, the Trustee or the Holders of 25% in principal amount of
the Debt Securities of the affected series may declare the entire principal
amount of all the Debt Securities of that series to be due and immediately
payable. This is called a declaration of acceleration of maturity. A declaration
of acceleration of maturity may be canceled by the Holders of at least a
majority in principal amount of the Debt Securities of the affected series.
(Section 502)
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Except in cases of default, where the Trustee has some special duties, the
Trustee is not required to take any action under the Indenture at the request of
any Holders unless the Holders offer the Trustee reasonable protection from
expenses and liability (called an "indemnity"). (Section 507 and TIA Section
315) If reasonable indemnity is provided, the Holders of a majority in principal
amount of the Outstanding Debt Securities of the relevant series may direct the
time, method and place of conducting any lawsuit or other formal legal action
seeking any remedy available to the Trustee. The Trustee may refuse to follow
those directions in certain circumstances. (Section 512) No delay or omission in
exercising any right or remedy will be treated as a waiver of such right, remedy
or Event of Default. (Section 511)
Before you are allowed to bypass the Trustee and bring your own lawsuit or
other formal legal action or take other steps to enforce your rights or protect
your interests relating to the Debt Securities, the following must occur:
- You must give the Trustee written notice that an Event of Default has
occurred and remains uncured.
- The Holders of 25% in principal amount of all outstanding Debt Securities
of the relevant series must make a written request that the Trustee take
action because of the default and must offer the Trustee indemnity
satisfactory to the Trustee against the cost and other liabilities of
taking that action.
- The Trustee must not have taken action for 60 days after receipt of the
above notice and offer of indemnity.
- The Holders of a majority in principal amount of the Debt Securities must
not have given the Trustee a direction inconsistent with the above notice.
(Section 512)
However, you are entitled at any time to bring a lawsuit for the payment of
money due on your Debt Securities on or after the due date. (Section 508)
Holders of a majority in principal amount of the Debt Securities of the
affected series may waive any past defaults other than (1) the payment of
principal, any premium, interest or Additional Amounts or (2) in respect of a
covenant that cannot be modified or amended without the consent of each Holder.
(Section 513)
IF YOUR SECURITIES ARE HELD FOR YOU BY A BANK OR BROKERAGE FIRM, YOU SHOULD
CONSULT SUCH BANK OR BROKERAGE FIRM FOR INFORMATION ON HOW TO GIVE NOTICE OR
DIRECTION TO OR MAKE A REQUEST OF THE TRUSTEE AND TO MAKE OR CANCEL A
DECLARATION OF ACCELERATION.
Each year, we will furnish to the Trustee a written statement of certain of
our officers certifying that to their knowledge we are in compliance with the
Indenture and the Debt Securities, or else specifying any default. (Section
1005)
MERGER OR CONSOLIDATION
Under the terms of the Indentures, we are generally permitted to consolidate
or merge with another firm. We are also permitted to sell all or substantially
all of our assets to another firm (Section 801). However, we may not take any of
these actions unless all the following conditions are met:
- Where we merge out of existence or sell our assets, the other firm must
agree to be legally responsible for the Debt Securities. (Section 801)
- The merger or sale of assets must not cause a default on the Debt
Securities and we must not already be in default (unless the merger or
sale would cure the default). For purposes of this no-default test, a
default would include an Event of Default that has occurred and not been
cured,
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as described on page 9 under "--What is An Event of Default?" A default
for this purpose would also include any event that would be an Event of
Default if the requirements for giving us default notice or our default
having to exist for a specific period of time were disregarded. (Section
801)
- Under the Senior Indenture, no merger or sale of assets may be made if as
a result any of our property or assets or a Subsidiary's would become
subject to any mortgage, lien or other encumbrance unless either (1) such
mortgage, lien or other encumbrance could be created pursuant to Section
1006 of such Indenture (see "--Senior Indenture Provisions--Limitation on
Liens" below) without equally and ratably securing the Indenture
Securities or (2) such Indenture Securities are secured equally and
ratably with or prior to the debt secured by such mortgage, lien or other
encumbrance. (Section 801)
- We must deliver certain certificates and documents to the Trustee.
(Section 801)
- We must satisfy any other requirements specified in the prospectus
supplement.
MODIFICATION OR WAIVER
There are three types of changes we can make to the Indenture and the Debt
Securities.
CHANGES REQUIRING YOUR APPROVAL. First, there are changes that cannot be
made to your Debt Securities without your specific approval. (Section 902)
Following is a list of those types of changes:
- change the Stated Maturity of the principal of or interest on a Debt
Security;
- reduce any amounts due on a Debt Security;
- reduce the amount of principal payable upon acceleration of the Maturity
of a Debt Security following a default;
- adversely affect any right of repayment at the Holder's option;
- change the place (except as otherwise described in this prospectus) or
currency of payment on a Debt Security;
- impair your right to sue for payment;
- adversely affect any right to convert or exchange a Debt Security in
accordance with its terms;
- modify the subordination provisions in the Subordinated Indenture in a
manner that is adverse to holders of the Subordinated Securities;
- reduce the percentage of Holders of Debt Securities whose consent is
needed to modify or amend the Indenture;
- reduce the percentage of Holders of Debt Securities whose consent is
needed to waive compliance with certain provisions of the Indenture or to
waive certain defaults;
- modify any other aspect of the provisions of the Indenture dealing with
modification and waiver of past defaults (Section 513) or changes to the
quorum or voting requirements of Section 1504 or waiver of certain
covenants (Section 1008 of the Senior Indenture and Section 1006 of the
Subordinated Indenture); and
- change any obligation of ours to pay Additional Amounts.
CHANGES REQUIRING A MAJORITY VOTE. The second type of change to the
Indenture and the Outstanding Debt Securities is the kind that requires a vote
in favor by Holders of Outstanding Debt Securities owning a majority of the
principal amount of the particular series affected. Most changes fall into this
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category, except for clarifying changes and certain other changes that would not
adversely affect Holders of the Outstanding Debt Securities in any material
respect. The same vote would be required for us to obtain a waiver of all or
part of certain covenants in the applicable Indenture (Section 1008 of the
Senior Indenture; Section 1006 of the Subordinated Indenture), or a waiver of a
past default. However, we cannot obtain a waiver of a payment default or any
other aspect of the Indentures or the Outstanding Debt Securities listed in the
first category described previously under "--Changes Requiring Your Approval"
unless we obtain your individual consent to the waiver.
CHANGES NOT REQUIRING APPROVAL. The third type of change does not require
any vote by Holders of Outstanding Debt Securities. This type is limited to
clarifications and certain other changes that would not adversely affect Holders
of the Outstanding Debt Securities in any material respect. (Section 901)
FURTHER DETAILS CONCERNING VOTING. When taking a vote, we will use the
following rules to decide how much principal amount to attribute to a Debt
Security:
- For Original Issue Discount Securities, we will use the principal amount
that would be due and payable on the voting date if the Maturity of the
Debt Securities were accelerated to that date because of a default.
- For Debt Securities whose principal amount is not known (for example,
because it is based on an index), we will use a special rule for that Debt
Security described in the prospectus supplement.
- For Debt Securities denominated in one or more foreign currencies or
currency units, we will use the U.S. dollar equivalent.
Debt Securities will not be considered Outstanding, and therefore not
eligible to vote, if we have deposited or set aside in trust for you money for
their payment or redemption. Debt Securities will also not be eligible to vote
if they have been fully defeased as described later under "Defeasance--Full
Defeasance." (Section 101)
We will generally be entitled to set any day as a record date for the
purpose of determining the Holders of Outstanding Indenture Securities that are
entitled to vote or take other action under the Indentures. If we set a record
date for a vote or other action to be taken by Holders of a particular series,
that vote or action may be taken only by persons who are Holders of Outstanding
Indenture Securities of that series on the record date and must be taken within
180 days following the record date or another period that we may specify. We may
shorten or lengthen this period from time to time. (Section 104)
IF YOUR SECURITIES ARE HELD BY A BANK OR BROKERAGE FIRM, YOU SHOULD CONSULT SUCH
BANK OR BROKERAGE FIRM FOR INFORMATION ON HOW APPROVAL MAY BE GRANTED OR DENIED
IF WE SEEK TO CHANGE THE INDENTURE OR THE DEBT SECURITIES OR REQUEST A WAIVER.
Each Indenture contains provisions for convening meetings of the Holders of
Debt Securities issued as Bearer Securities. (Section 1501) A meeting may be
called at any time by the applicable Trustee, and also, upon request, by us or
the Holders of at least 10% in principal amount of the Outstanding Debt
Securities of that series, upon notice given as provided in the applicable
Indenture. (Section 1502) Except for any consent that must be given by the
Holder of each Debt Security affected thereby, as described above, any
resolution presented at a meeting (or an adjourned meeting duly reconvened) at
which a quorum is present may be adopted by the Holders of a majority in
principal amount of the Outstanding Debt Securities of that series; except, that
any resolution that the Holders of a specified percentage (which is less than a
majority in principal amount of the Outstanding Debt Securities of a series) may
adopt or may be adopted at a meeting (or an adjourned meeting duly
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reconvened) at which a quorum is present by vote of the specified percentage of
Holders of the Outstanding Debt Securities of that series. Any resolution passed
or decision taken at any meeting of Holders of Debt Securities of a series in
accordance with the applicable Indenture will be binding on all Holders of Debt
Securities of that series and any related coupons. The quorum at any meeting
called to adopt a resolution will be persons holding or representing a majority
in principal amount of the Outstanding Debt Securities of a series, except that
if any action is to be taken at such meeting which may be given by the Holders
of not less than a specified percentage in principal amount of the Outstanding
Debt Securities of a series, the persons holding or representing such specified
percentage in principal amount of the Outstanding Debt Securities of that series
will constitute a quorum. (Section 1504)
Notwithstanding the above, if any action is to be taken at a meeting of
Holders of Debt Securities of a series that the applicable Indenture expressly
provides may be taken by the Holders of a specified percentage in principal
amount of all Outstanding Debt Securities affected thereby or of the Holders of
such series and one or more additional series: (1) there will be no minimum
quorum requirement for such meeting and (2) the principal amount of the
Outstanding Debt Securities of such series that vote in favor of such action
will be taken into account in determining whether such action has been made,
given or taken under such Indenture. (Section 1504)
DEFEASANCE
The following discussion of full defeasance and covenant defeasance will be
applicable to your series of Debt Securities only if we choose to have them
apply to that series. If we do so choose, we will specify the choice in the
prospectus supplement. (Section 1401)
FULL DEFEASANCE. If there is a change in federal tax law, as described
below, we can legally release ourselves from all payment and other obligations
on the Debt Securities (called "full defeasance") if we put in place the
following other arrangements for you to be repaid:
- We must deposit in trust for your benefit and the benefit of all other
direct Holders of the Debt Securities a combination of money and U.S.
government or U.S. government agency notes or bonds that will generate
enough cash to make interest, principal and any other payments on the Debt
Securities on their various due dates.
- We must deliver to the Trustee a legal opinion confirming that there has
been a change in current federal tax law or an IRS ruling that lets us
make the above deposit without causing you to be taxed on the Debt
Securities any differently than if we did not make the deposit at
Maturity. (Sections 1403 and 1404) (Under current federal tax law, the
deposit and our legal release from the Debt Securities would be treated as
though we paid you your share of the cash and notes or bonds at the time
such cash and notes or bonds are deposited in trust in exchange for your
Debt Securities and you would recognize gain or loss on the Debt
Securities at the time of the deposit.)
If we ever did accomplish full defeasance, as described above, you would have to
rely solely on the trust deposit for repayment of the Debt Securities. You could
not look to us for repayment in the unlikely event of any shortfall. Conversely,
the trust deposit would most likely be protected from claims of our lenders and
other creditors if we ever become bankrupt or insolvent. You would also be
released from the subordination provisions on the Subordinated Debt Securities
described later under "Subordination" on page 17.
COVENANT DEFEASANCE. Under current federal tax law, we can make the same
type of deposit described above and be released from some of the restrictive
covenants in the Indentures. This is called "covenant defeasance." In that
event, you would lose the protection of those restrictive covenants but would
gain the protection of having money and debt securities set aside in trust to
repay the Debt
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Securities. You also would be released from the subordination provisions on the
Subordinated Securities described under "Subordination" on page 17. In order to
achieve covenant defeasance, we must do the following:
- We must deposit in trust for your benefit and the benefit of all other
direct Holders of the Debt Securities a combination of money and U.S.
government or U.S. government agency notes or bonds that will generate
enough cash to make interest, principal and any other payments on the Debt
Securities on their various due dates.
- We must deliver to the Trustee a legal opinion of our counsel confirming
that under current federal income tax law we may make the above deposit
without causing you to be taxed on the Debt Securities any differently
than if we did not make the deposit and just repaid the Debt Securities
ourselves.
If we accomplish covenant defeasance, you can still look to us for repayment
of the Debt Securities if there were a shortfall in the trust deposit or the
trustee is prevented from making payment. In fact, if one of the remaining
Events of Default occurred (such as our bankruptcy) and the Debt Securities
become immediately due and payable, there may be such a shortfall. Depending on
the event causing the default, you may not be able to obtain payment of the
shortfall.
BOOK-ENTRY DEBT SECURITIES
Debt Securities of a series may be issued in whole or in part in global form
that will be deposited with, or on behalf of, a depository identified in the
prospectus supplement. Global securities may be issued in either registered or
bearer form and in either temporary or permanent form (each, a "Global
Security"). Global Securities will be registered in the name of a financial
institution we select, and the Debt Securities included in the Global Securities
may not be transferred to the name of any other direct Holder unless the special
circumstances described below occur. The financial institution that acts as the
sole direct Holder of the Global Security is called the "Depositary". Any person
wishing to own a Debt Security must do so indirectly by virtue of an account
with a broker, bank or other financial institution that, in turn, has an account
with the Depositary.
SPECIAL INVESTOR CONSIDERATIONS FOR GLOBAL SECURITIES. Our obligation, as
well as the obligations of the Trustee and those of any third parties employed
by us or the Trustee, run only to Persons who are registered as Holders of Debt
Securities. For example, once we make payment to the registered Holder, we have
no further responsibility for the payment even if that Holder is legally
required to pass the payment along to you but does not do so. As an indirect
holder, an investor's rights relating to a Global Security will be governed by
the account rules of the investor's financial institution and of the Depositary,
as well as general laws relating to debt securities transfers.
An investor should be aware that when Debt Securities are issued in the form
of Global Securities:
- The investor cannot get Debt Securities registered in his or her own name.
- The investor cannot receive physical certificates for his or her interest
in the Debt Securities.
- The investor must look to his or her own bank or brokerage firm for
payments on the Debt Securities and protection of his or her legal rights
relating to the Debt Securities.
- The investor may not be able to sell interests in the Debt Securities to
some insurance companies and other institutions that are required by law
to hold the physical certificates of Debt Securities that they own.
- The Depositary's policies will govern payments, transfers, exchange and
other matters relating to the investor's interest in the Global Security.
We and the Trustee have no responsibility for any
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aspect of the Depositary's actions or for its records of ownership
interests in the Global Security. We and the Trustee also do not supervise
the Depositary in any way.
- The Depositary will usually require that interests in a Global Security be
purchased or sold within its system using same-day funds.
DTC management is aware that some computer applications, systems, and the
like for processing data ("Systems") that are dependent upon calendar dates,
including dates before, on, and after January 1, 2000, may encounter "Year 2000
problems." DTC has informed its participants and other members of the financial
community (the "Industry") that it has developed and is implementing a program
so that its Systems, as the same relate to the timely payment of distributions
(including principal and income payments) to securityholders, book-entry
deliveries, and settlement of trades within DTC ("DTC Services"), continue to
function appropriately. This program includes a technical assessment and a
remediation plan, each of which is complete. Additionally, DTC's plan includes a
testing phase, which is expected to be completed within appropriate time frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including but not limited to issuers and their agents, as
well as DTC's direct and indirect participants and third party vendors to whom
DTC licenses software and hardware, and third party vendors from whom DTC relies
for information or the provision of services, including telecommunication and
electrical utility service providers, among others. DTC has informed the
Industry that it is contacting (and will continue to contact) third party
vendors from whom DTC acquires services to: (i) impress upon them the importance
of such services being Year 2000 compliant; and (ii) determine the extent of
their efforts for Year 2000 remediation (and, as appropriate, testing) of their
services. In addition, DTC is in the process of developing such contingency
plans as it deems appropriate.
According to DTC, the foregoing information with respect to DTC has been
provided to the Industry for informational purposes only and is not intended to
serve as a representation, warranty, or contract modification of any kind.
SPECIAL SITUATIONS WHEN GLOBAL SECURITY WILL BE TERMINATED. In a few
special situations described later, the Global Security will terminate and
interests in it will be exchanged for physical certificates representing Debt
Securities. After that exchange, the choice of whether to hold Debt Securities
directly or indirectly through an account at its bank or brokerage firm will be
up to the investor. Investors must consult their own banks or brokers to find
out how to have their interests in Debt Securities transferred to their own
names, so that they will be direct Holders.
The special situations for termination of a Global Security are:
- When the Depositary notifies us that it is unwilling, unable or no longer
qualified to continue as Depositary (unless a replacement Depositary is
named).
- When an Event of Default on the Debt Securities has occurred and has not
been cured. (Defaults are discussed under "Events of Default" on page 9.)
- When and if we decide to terminate a Global Security.
The prospectus supplement may list situations for terminating a Global
Security that would apply only to the particular series of Debt Securities
covered by the prospectus supplement. When
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a Global Security terminates, the Depositary (and not we or the Trustee) is
responsible for deciding the names of the institutions that will be the initial
direct Holders. Unless otherwise provided in the prospectus supplement, Debt
Securities that are represented by a Global Security will be issued in
denominations of $1,000 and any integral multiple thereof, and will be issued in
registered form only, without coupons. Section 302
IN THE "ADDITIONAL MECHANICS" SECTION OF THIS DESCRIPTION, "YOU" MEANS DIRECT
HOLDERS AND NOT INDIRECT HOLDERS OF DEBT SECURITIES.
RESIGNATION OF TRUSTEE
Each Trustee may resign or be removed with respect to one or more series of
Indenture Securities and a successor Trustee may be appointed to act with
respect to such series. (Section 608) In the event that two or more persons are
acting as Trustee with respect to different series of Indenture Securities under
one of the Indentures, each such Trustee shall be a Trustee of a trust separate
and apart from the trust administered by any other such Trustee (Section 609),
and any action described herein to be taken by the "Trustee" may then be taken
by each such Trustee with respect to, and only with respect to, the one or more
series of Indenture Securities for which it is Trustee.
SENIOR INDENTURE PROVISIONS
LIMITATION ON LIENS
We covenant in the Senior Indenture that we will not, nor will we permit any
Restricted Subsidiary to, incur, assume or guarantee any debt (herein referred
to as "Debt") if such Debt is secured by any mortgage, security interest,
pledge, lien or other encumbrance (herein referred to as "mortgage" or
"mortgages") upon any Important Property (as defined below) of ours or any
Restricted Subsidiary or any shares of stock or indebtedness of any Restricted
Subsidiary, whether owned at the date of such Indenture or thereafter acquired,
without effectively securing the Indenture Securities issued under the Senior
Indenture equally and ratably with or prior to such Debt. The foregoing
restriction will not apply to: (1) mortgages on any property acquired,
constructed or improved after the date of such Indenture which are created or
assumed within 120 days after such acquisition, construction or improvement to
secure or provide for the payment of the purchase price or cost thereof incurred
after the date of such Indenture, or existing mortgages on property acquired
after the date of such Indenture, provided that such mortgages do not apply to
any Important Property already owned by us or a Restricted Subsidiary other than
previously unimproved real property; (2) existing mortgages on any property
acquired from a corporation merged with or into, or substantially all of the
assets of which are acquired by, us or a Restricted Subsidiary; (3) mortgages on
property of any corporation existing at the time it becomes a Restricted
Subsidiary; (4) mortgages securing Debt owed by a Restricted Subsidiary to us or
to another Restricted Subsidiary; (5) mortgages in favor of governmental bodies
to secure advance or other payments pursuant to any contract or statute or to
secure indebtedness incurred to finance the purchase price or cost of
constructing or improving the property subject to such mortgages, including
mortgages to secure tax exempt pollution control revenue bonds; (6) sales of
receivables that are reflected as secured indebtedness; (7) certain other liens
not related to the borrowing of money; (8) extensions, renewals or replacements
of the foregoing; (9) mortgages on margin stock owned by us and Restricted
Subsidiaries to the extent such margin stock exceeds 25% of the fair market
value of Important Property of ours and the Restricted Subsidiaries plus certain
stock and indebtedness of the Restricted Subsidiaries; and (10) mortgages on
Important Property of, or any shares of stock or indebtedness issued or incurred
by, any Restricted Subsidiary organized under the laws of Canada. (Section 1006
of the Senior Indenture)
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The foregoing restrictions do not apply to the incurrence, assumption or
guarantee by us or any Restricted Subsidiary of Debt secured by a mortgage that
would otherwise be subject to such restrictions up to an aggregate amount which,
together with all other Debt secured by mortgages (not including secured Debt
permitted under the foregoing exceptions) and the Attributable Debt (generally
defined as the discounted present value of net rental payments) associated with
Sale and Lease-back Transactions existing at such time (other than Sale and
Lease-back Transactions the proceeds of which have been or will be applied as
set forth in clause (3) or (4) under "Limitation on Sale and Lease-back
Transactions" below, and other than Sale and Lease-back Transactions in which
the property involved would have been permitted to be mortgaged under clause (1)
above), does not exceed 5% of our Consolidated Net Tangible Assets including our
consolidated subsidiaries, as shown on the audited consolidated balance sheet
contained in the latest annual report to our stockholders. (Section 1006 of the
Senior Indenture)
The term "Restricted Subsidiary" is defined in the Senior Indenture to mean
any subsidiary (1) engaged in, or whose principal assets consist of property
used by us or any Restricted Subsidiary in, the manufacture of products within
the United States or Canada or in the sale of products principally to customers
located in the United States or Canada except any corporation which is a retail
dealer in which we have, directly or indirectly, an investment under an
arrangement providing for the liquidation of such investment; or (2) which we
designate as a Restricted Subsidiary. (Section 1006 of the Senior Indenture)
The term "Important Property" is defined in the Senior Indenture to include:
(1) any manufacturing plant, including its machinery and equipment, used by us
or a Restricted Subsidiary primarily for the manufacture of products to be sold
by us or such Restricted Subsidiary; (2) our executive office and administrative
building in Moline, Illinois; and (3) research and development facilities;
except, in each case, property the fair value of which as determined by the
Board of Directors does not at the time exceed 1% of our Consolidated Net
Tangible Assets including our consolidated subsidiaries, as shown on the audited
consolidated balance sheet contained in the latest annual report to our
stockholders. (Section 1006 of the Senior Indenture)
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS
We covenant in the Senior Indenture that we will not nor will we permit any
Restricted Subsidiary to enter into any arrangement with any Person providing
for the leasing to us or any Restricted Subsidiary of any Important Property
(except for temporary leases for a term, including renewals, of not more than
three years) which has been or is to be sold by us or such Restricted Subsidiary
to such Person unless the net proceeds are at least equal to the fair value (as
determined by the Board of Directors) of such property and either (1) we or such
Restricted Subsidiary would be entitled to incur Debt secured by a mortgage on
such Important Property without securing the Indenture Securities issued under
the Senior Indenture under clause (1) of the first paragraph under "Limitation
on Liens" above; (2) the Attributable Debt associated with such property would
be an amount permitted under the second paragraph under "Limitation on Liens"
above; (3) we apply an amount equal to the fair value of such Important Property
to the retirement of Indenture Securities or certain long-term indebtedness of
ours or a Restricted Subsidiary, as the case may be; or (4) we enter into a BONA
FIDE commitment to expend for the acquisition or improvement of an Important
Property an amount at least equal to the fair value of such Important Property.
(Section 1007 of the Senior Indenture)
SUBORDINATED INDENTURE PROVISIONS
SUBORDINATION
Upon any distribution of our assets in the event of any dissolution, winding
up, liquidation or reorganization, the payment of the principal of (and premium,
if any) and interest, if any, on Subordinated Securities is to be subordinated
to the extent provided in the Subordinated Indenture in right of
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payment to the prior payment in full of all Senior Indebtedness (Sections 1601
and 1602 of the Subordinated Indenture), but our obligation to make payment of
principal (and premium, if any) or interest, if any, on Subordinated Securities
will not otherwise be affected. (Section 1604 of the Subordinated Indenture) In
addition, no payment on account of principal (and premium, if any), sinking fund
or interest, if any, may be made on the Subordinated Securities unless full
payment of all amounts then due in respect of the principal (and premium, if
any), sinking fund and interest on Senior Indebtedness has been made or duly
provided for in money or money's worth. (Section 1603 of the Subordinated
Indenture) In the event that, notwithstanding the foregoing, any such payment by
us is received by the Subordinated Trustee or the holders of any of the
Subordinated Securities before all Senior Indebtedness is paid in full, such
payment or distribution will be paid over to the holders of such Senior
Indebtedness or on their behalf for application to the payment of all such
Senior Indebtedness remaining unpaid until all such Senior Indebtedness has been
paid in full, after giving effect to any concurrent payment or distribution to
the holders of such Senior Indebtedness. Subject to the payment in full of all
Senior Indebtedness upon such distribution of our assets, the holders of the
Subordinated Securities will be subrogated to the rights of the holders of the
Senior Indebtedness to the extent of payments made to the holders of such Senior
Indebtedness out of the distributive share of the Subordinated Securities.
(Section 1602 of the Subordinated Indenture) By reason of such subordination, in
the event of a distribution of assets upon insolvency, certain of our general
creditors may recover more, ratably, than holders of the Subordinated
Securities. The Subordinated Indenture provides that the subordination
provisions will not apply to money and securities held in trust pursuant to the
defeasance provisions of the Subordinated Indenture. (Section 1402 of the
Subordinated Indenture)
Senior Indebtedness is defined in the Subordinated Indenture as the
principal of (and premium, if any) and unpaid interest on (1) indebtedness of
ours (including indebtedness of others guaranteed by us), whether outstanding on
the date of the Subordinated Indenture or thereafter created, incurred, assumed
or guaranteed, for money borrowed (other than the Indenture Securities issued
under the Subordinated Indenture and the 5 1/2% Convertible Subordinated
Debentures due 2001), unless in the instrument creating or evidencing the same
or pursuant to which the same is outstanding it is provided that such
indebtedness is not senior or prior in right of payment to the Subordinated
Securities and (2) renewals, extensions, modifications and refundings of any
such indebtedness. (Section 101 of the Subordinated Indenture)
If this prospectus is being delivered in connection with the offering of a
series of Subordinated Securities, the accompanying prospectus supplement or the
information incorporated by reference will set forth the approximate amount of
Senior Indebtedness outstanding as of a recent date.
THE TRUSTEES UNDER THE INDENTURES
The Chase Manhattan Bank and The Bank of New York are two of a number of
banks with which we maintain ordinary banking relationships and from which we
have obtained credit facilities and lines of credit. The Chase Manhattan Bank
also serves as trustee under other indentures under which we are the obligor or
John Deere Capital Corporation is the obligor. Hans W. Becherer, our Chairman
and the Chairman of John Deere Capital Corporation and John R. Stafford, one of
our directors, are also directors of The Chase Manhattan Bank and its parent,
The Chase Manhattan Bank Corporation. The Bank of New York also serves as
trustee under other indentures under which John Deere Capital Corporation is the
obligor.
CERTAIN CONSIDERATIONS RELATING TO FOREIGN CURRENCIES
Debt Securities denominated or payable in foreign Currencies may entail
significant risks. These risks include, without limitation, the possibility of
significant fluctuations in the foreign currency markets, the imposition or
modification of foreign exchange controls and potential illiquidity in the
secondary market. These risks will vary depending upon the Currency or
Currencies involved and will be more fully described in the applicable
prospectus supplement.
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DESCRIPTION OF DEBT WARRANTS
We may issue (either together with other Offered Securities or separately)
Debt Warrants to purchase Underlying Debt Securities ("Offered Debt Warrants").
Such Debt Warrants will be issued under warrant agreements (each a "Debt Warrant
Agreement") to be entered into between us and a bank or trust company, as
warrant agent (the "Debt Warrant Agent"), as described in the prospectus
supplement. A copy of the form of Debt Warrant Agreement has been filed as an
exhibit to the registration statement. The following summary of the Debt Warrant
Agreement is not complete and is subject to, and are qualified in its entirety
by reference to, all the provisions of the Debt Warrant Agreement and the
accompanying Debt Warrant certificates, including the definitions therein of
certain terms.
GENERAL
You should read the prospectus supplement for the terms of the Offered Debt
Warrants, including the following:
(1) The title and aggregate number of such Debt Warrants.
(2) The title, rank, aggregate principal amount and terms of the
Underlying Debt Securities purchasable upon exercise of such Debt Warrants.
(3) The principal amount of Underlying Debt Securities that may be
purchased upon exercise of each such Debt Warrant, and the price or the
manner of determining the price at which such principal amount may be
purchased upon such exercise.
(4) The time or times at which, or period or periods, in which, such
Debt Warrants may be exercised and the expiration date of such Debt
Warrants.
(5) Any optional redemption terms.
(6) Whether certificates evidencing such Debt Warrants ("Debt Warrant
Certificates") will be issued in registered or bearer form, and, if
registered, where they may be transferred and exchanged.
(7) Whether such Debt Warrants are to be issued with any Debt Securities
or any other Securities.
(8) The date, if any, on and after which such Debt Warrants and
Underlying Debt Securities will be separately transferable.
(9) Any other terms of such Debt Warrants.
If applicable, the prospectus supplement will also set forth information
concerning other securities offered thereby and a discussion of federal income
tax considerations relevant thereto. Debt Warrant Certificates will be
exchangeable for new Debt Warrant Certificates of different denominations.
No service charge will be made for any permitted transfer or exchange of
Debt Warrant Certificates, but we may require payment of any tax or other
governmental charge payable in connection therewith. Debt Warrants may be
exercised and exchanged and Debt Warrants in registered form may be presented
for registration of transfer at the corporate trust office of the Debt Warrant
Agent or any other office indicated in the prospectus supplement.
EXERCISE OF DEBT WARRANTS
Each Offered Debt Warrant will entitle the holder thereof to purchase such
amount of Underlying Debt Securities at the exercise price set forth in, or
calculable from, the prospectus supplement relating to such Offered Debt
Warrants. After the close of business on the expiration date, unexercised Debt
Warrants will become void.
Debt Warrants may be exercised by payment to the Debt Warrant Agent of the
applicable exercise price and by delivery to the Debt Warrant Agent of the
related Debt Warrant Certificate, properly
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completed. Debt Warrants will be deemed to have been exercised upon receipt of
the exercise price, subject to the receipt by the Debt Warrant Agent, within
five business days thereafter, of the Debt Warrant Certificate or Certificates
evidencing such Debt Warrants. Upon receipt of such payment and the properly
completed Debt Warrant Certificates at the corporate trust office of the Debt
Warrant Agent or any other office indicated in the prospectus supplement, we
will, as soon as practicable, deliver the amount of Underlying Debt Securities
purchased upon such exercise. If fewer than all of the Debt Warrants represented
by any Debt Warrant Certificate are exercised, a new Debt Warrant Certificate
will be issued for the unexercised Debt Warrants. The holder of a Debt Warrant
will be required to pay any tax or other governmental charge that may be imposed
in connection with any transfer involved in the issuance of Underlying Debt
Securities purchased upon such exercise.
MODIFICATIONS
There are three types of changes we can make to the Debt Warrant Agreement
and the Offered Debt Warrants.
CHANGES REQUIRING YOUR APPROVAL. First, there are changes that cannot be
made to your Debt Warrants without your specific approval. Those types of
changes include modifications and amendments that:
- accelerate the expiration date,
- increase the exercise price,
- reduce the number of outstanding Debt Warrants, the consent of the holders
of which is required for any such modification or amendment,
- otherwise materially and adversely affect the rights of the holders of the
Debt Warrants.
CHANGES REQUIRING A MAJORITY VOTE. The second type of change to the Debt
Warrant Agreement and the Offered Debt Warrants is the kind that requires a vote
in favor by Holders of Debt Warrants owning a majority of the principal amount
of the particular series affected. Most changes fall into this category.
CHANGES NOT REQUIRING APPROVAL. The third type of change does not require
any vote by holders of Debt Warrants. This type of change is limited to
clarifications and other changes that would not materially and adversely affect
holders of the Debt Warrants.
NO RIGHTS AS HOLDERS OF UNDERLYING DEBT SECURITIES
Before the warrants are exercised, Holders of Debt Warrants are not entitled
to payments of principal of premium, or interest, if any, on the related
Underlying Debt Securities or to exercise any other rights whatsoever as holders
of the Underlying Debt Securities.
PLAN OF DISTRIBUTION
We may sell the Offered Securities (a) through agents; (b) to or through
underwriters; or (c) directly to other purchasers. Any underwriters or agents
will be identified and their compensation described in a prospectus supplement.
We (directly or through agents) may sell, and the underwriters may resell,
the Offered Securities in one or more transactions, including negotiated
transactions, at a fixed public offering price or prices, which may be changed,
or at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Offered Securities, the underwriters or
agents may receive compensation from us or from purchasers of the Offered
Securities for whom they may act as agents. The underwriters may sell Offered
Securities to or through dealers, who may also receive compensation from
purchasers of the Offered Securities for whom they may act as agents.
Compensation may be in the form of discounts, concessions or commissions.
Underwriters, dealers and agents that participate in
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the distribution of the Offered Securities may be underwriters as defined in the
Securities Act of 1933 (the "Act"), and any discounts or commissions received by
them from us and any profit on the resale of the Offered Securities by them may
be treated as underwriting discounts and commissions under the Act.
We will indemnify the underwriters and agents against certain civil
liabilities, including liabilities under the Act.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, us or our affiliates in the ordinary course of their businesses.
If so indicated in the prospectus supplement relating to a particular series
or issue of Offered Securities, we will authorize underwriters, dealers or
agents to solicit offers by certain institutions to purchase such Offered
Securities from us pursuant to delayed delivery contracts providing for payment
and delivery at a future date. Such contracts will be subject only to those
conditions set forth in the prospectus supplement, and the prospectus supplement
will set forth the commission payable for solicitation of such contracts.
LEGAL OPINIONS
The validity of the Securities will be passed upon for us by Shearman &
Sterling, 599 Lexington Avenue, New York, New York 10022, and for any
underwriters, dealers or agents by Brown & Wood LLP, One World Trade Center, New
York, New York 10048.
EXPERTS
The financial statements incorporated in this prospectus by reference from
our Annual Report on Form 10-K have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
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[LOGO]
$750,000,000
DEERE & COMPANY
$500,000,000 7.85% DEBENTURES DUE MAY 15, 2010
$250,000,000 8.10% DEBENTURES DUE MAY 15, 2030
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PROSPECTUS SUPPLEMENT
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MERRILL LYNCH & CO.
SALOMON SMITH BARNEY
BANC ONE CAPITAL MARKETS, INC.
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON
DEUTSCHE BANC ALEX. BROWN
APRIL 26, 2000
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